The economics of climate change is lagging behind the science. We need to improve on this quickly if we are to take the right investment decisions, argues Nick Mabey.
One of the critical policy questions we face is ‘how far and fast should we cut global greenhouse emissions to effectively ensure climate security? Mabey acknowledges that ‘Uncertainty abounds over any choice.’ (p.5) But, he says ‘this is a risk management decision – not a quest for truth.’ (p.5)
‘However, the critical point to remember is that while we can always reverse our choices to invest in a low carbon future; once we have passed the critical climate change tipping points we can never regain our climate security.’ (p.5)
Based on their assessment of irreversible ‘tipping point’ climate change risks, Climate Scientists have been arguing for ‘urgent and strong’ mitigation action (stabilisation of atmospheric carbon-equivalents below 450ppm). Meanwhile the majority of economic studies seem to be focused on ‘weak mitigation scenarios'(stabilising concentrations between 550-700 ppm). (pp.1-2)
So the economic studies we have are not much help with the choices we face.
‘If we were to accept the need to stabilise emissions at 450ppm, this would require much faster investment in low carbon energy sources in the next 25 years. Investment would have to prevent lock-in to high carbon power infrastructure. This would also require a far more aggressive and interventionist approach by policy makers to the research, development and deployment of new technologies over the next 5-15 years.’ (p.4)
As Mabey says, ‘This is not just an economic choice but a security choice as well. If we fail to drive transformation quickly enough we would have no ability to correct our mistake. For a high-carbon infrastructure cannot be dismantled overnight without prohibitive cost. Similarly, we cannot suck carbon from the atmosphere at scale.’ (p.4) Among our responses to climate change then, we urgently need to invest in economic studies addressing the real choices we face: studies that can help provide guidance to policymakers.
Nick Mabey is Chief Executive of E3G (whose tagline is ‘Change Agents for Sustainable Develpment’), and was an expert reviewer of Working Group III of the Third IPCC Assessment report.